A digest of events, trends, issues, ideas and journalism from and about rural America, by the Institute for Rural Journalism and Community Issues, based at the University of Kentucky.
Links may expire, require subscription or go behind pay walls. Please send news and knowledge you think would be useful to al.cross@uky.edu. Follow us on Twitter @RuralJournalism

Wednesday, July 25, 2018

Newsprint tariffs' biggest hit is on small and independent papers, striking at heart of their main competitive advantage

The recent tariffs on newsprint may be the most existential threat ever faced by some newspapers. Printing is usually second only to personnel in newspaper costs, and the tariffs on Canadian newsprint have increased printing costs as much as 30 percent, with independent newspapers taking the biggest hit, "Newsonomics" columnist Ken Doctor writes for Nieman Journalism Lab.

More papers are printing on fewer days, and even more are talking about it. “If these tariffs are removed, you’re not going back to seven days,” for dailies, Paul Boyle, senior vice president of public policy for the News Media Alliance, the dailies' main lobby, told Doctor.

Some are largely abandoning print. In London, Ohio, between Columbus and Springfield, The Madison Press, owned by AIM Media, stopped printing daily and went digital, while boosting its total-market-coverage weekly. the Papers are also losing revenue because the tariffs have made inserts more expensive for advertisers to print, said Tonda Rush, public policy director of the National Newspaper Association, which lobbies for weeklies and small dailies.

Ken Doctor

Independents and smaller chains are at a disadvantage, Doctor writes, because they have no partial ownership in newsprint companies and shorter-term newsprint deals. And for very small weeklies, with little staff, the printing bill is relatively larger, leaving less room to adjust.

The tariffs also strike at the heart of smaller newspapers' main competitive advantage. Weeklies and small dailies have been the healthiest part of the traditional news business, partly because their readers remain loyal to print, which returns much more revenue than digital. "Newsprint itself is still what makes newspaper companies possible," Doctor writes. "For most companies, more than 70 percent of all revenues in 2018 still remain print-based, with too many companies still seeing only 15 to 20 percent in digital revenue." That's for dailies; weeklies' numbers are generally lower.

Doctor asks, "Are these dailies much more ready in 2018 than they were in 2012 to 'go digital?' Can they transform their businesses and still keep any semblance of sufficient news-producing capacity in place?" If not, he writes, the tariffs could be a "black swan" event like those described by Nicholas Taleb in his book The Black Swan: "causing, exacerbating, or proliferating great change," especially among "those individuals or companies already ailing," Taleb wrote.

Newspapers are fighting the tariffs in Congress and at the Commerce Department and its International Trade Commission, but appeals either way mean “You got two years of litigation,” Boyle told Doctor, “You’re going to see more newspapers cut pages. They’re going to cut days of delivery. They’re going to lay people off.”

Doctor looks at the broader landscape: "In an era when the foundations of democracy and press meet daily new challenges in the homeland, we may encounter one of the hallmarks of non-democracies — a scarcity of the very stuff that newspaper printing depends upon. Here, even as a president assails the press nationally as the enemy of the people, and as Congress members now use the same mantra against publications like the Fresno Bee, that’s just collateral damage. Yet, it’s damage nonetheless, with the same impact of such newsprint-restricting moves in Russia and Turkey: less newsprint, less news, fewer journalists. Publishers now find themselves even more boxed in than they were six months ago. What will that prompt? More selling by independent publishers, for sure."

Subscribe to daily email feed

Subscribe to Rural Blog via RSS

About The Rural Blog

This blog generally follows traditional journalistic standards. It's not about opinions, though you may read one here occasionally. It's about facts that we think will be useful to rural journalists, non-rural journalists who do rural stories, and others interested in rural issues. We don't try to be provocative, so we don't generate as many comments as most blogs with the level of traffic we have, but we certainly invite comments -- and contributions, to al.cross@uky.edu. Feel free to republish blog items, with credit to us and the original source.